Regulation

Congress Might Finally Give the Pot Industry Access to Banks

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Congress passed its first ever standalone bipartisan marijuana legalization bill in 2019. The House of Representatives voted in September to approve the Secure and Fair Enforcement (SAFE) Banking Act, a bill that would allow state-legal marijuana businesses to access financial institutions without running afoul of federal law. Currently, nearly all transactions carried out by such businesses must happen in cash: Due to the federal prohibition on marijuana, any financial institution that does business with a pot shop could be charged with violating the federal Controlled Substances Act, the USA PATRIOT Act, the Bank Secrecy Act, and/or the Racketeer Influenced and Corrupt Organizations Act.

Allowing marijuana businesses access to the banking system would make it easier for them to pay their taxes and their employees. Supporters say it would also cut down on crime. "These businesses and their employees become targets for murder, robbery, assault, and more by dealing in all cash," Rep. Ed Perlmutter (D–Colo.), the bill's sponsor, said just before the House voted for it, 321–103.

The bill's movement through the Senate could be more fraught. Senate Banking Committee Chairman Mike Crapo (R–Idaho) initially promised to hold a vote on the SAFE Banking Act. But in early November, he said that impeachment proceedings might force a postponement until 2020. No vote was scheduled as of press time. With only four Senate GOP co-sponsors, the bill faces an uphill climb.

Even among proponents of marijuana legalization, there are mixed feelings. The Drug Policy Alliance and several allied groups sent a letter to House leaders before the September vote urging a more holistic approach. The worry is that passage of the SAFE Banking Act could reduce the momentum for more important reforms, such as the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, which would completely decriminalize marijuana, remove the drug from Schedule I of the Controlled Substances Act, and expunge many marijuana offenses.

It's a classic legislative conundrum. The banking bill could very well have enough support to become law, but it's not ideal. The more comprehensive bill, however, is certain to have less support from lawmakers—and maybe not enough to pass either chamber.

Still, the passage of a bill aiming to let states and individual businesses ignore the federal government's outdated stance toward marijuana is both historic and significant. "American voters have spoken and continue to speak," Perlmutter said on the House floor, just before the vote. "Prohibition is over."

Not quite. But we're slowly getting there.

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  1. Does this mean that Obama’s “I have a phone and a pen” back-door regulations preventing strippers, payday loan companies, porn actresses and title loan companies from accessing banks are going to be erased too?

    1. Don’t be ridiculous. Everybody knows that chocolate Jesus’ executive proclamations are in fact more permanent and immutable than duly enacted legislation. See DACA.

  2. Maybe I’m missing something, but what kind of imbecile goes to the bank and tells them they sell marijuana? Open an account, call it “Bob’s Nursery” and deposit money. The bank won’t know you sell marijuana unless you tell them.

    1. They’ll wonder why you do all your business in cash, and quite likely notify the Feds of possible structuring (as they’re required by law to do) if there’s too much.

      Much better to have it aboveboard.

      1. “Know your customer” is actually a federal requirement for running a bank now.

        And all deposits are apparently reportable. First it was anything over $10k. Then it was anything under $10k too, because they might be trying to avoid going over $10k. Keeping deposits under $10k is actually a crime now. So best to save up and deposit your cash when it goes over $10k.

        Yeah, with all of that, it is little wonder banks don’t want any part of it. Plus, Obama literally told them he’d put them out of business if they had customers that were in disfavored lines of business (Operation Choke Point).

  3. I don’t see why those silly pot businesses just don’t limit their business to state-chartered banks since, thanks to the Constitutional scheme of dual sovereignty, the feds have no control over what the states do.

  4. the State has finally figured out how to control the peasants with drugs while the peasants think they are free…lol

  5. Amazing that it took the Dems to do this considering the “freedom loving Republicans” had full control for two years and didn’t do jack about it.

    1. Amazing how it has huge bipartisan support in both houses and will be signed into law by a Republican president in repudiation of the federal policy enacted by a Democratic president who targeted legal weed shops for special enforcement.

      1. I honestly don’t get why Obama didn’t try to reschedule marijuana. He probably could’ve just ordered the DEA to do it, couldn’t he? It would have been great politics.

        1. The AG has the authority to reschedule drugs.

        2. Like gay marriage, they thought they could sit on the football and then take credit when it happened naturally. Now they’re letting Trump play that card.

  6. Senate Banking Committee Chairman Mike Crapo (R–Idaho) initially promised to hold a vote on the SAFE Banking Act. But in early November, he said that impeachment proceedings might force a postponement until 2020.

    Two things?!? How could the committee possibly be expected to do two things before the end of the year??

    1. Mike Crapo cannot walk and chew bubblegum at the same time.

  7. “Congress passed its first ever standalone bipartisan marijuana legalization bill in 2019.”

    Okay, when I see that “Congress” did something, I usually take that to mean both the House and the Senate. Stop being so clickbaity.

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  9. The House of Representatives voted in September to approve the Secure and Fair Enforcement (SAFE) Banking Act, a bill that would allow state-legal marijuana businesses to access financial institutions without running afoul of federal law.

    However, IIRC, possession of the actual product *is* running afoul of federal law.

  10. Isn’t it funny how those laws don’t apply to the IRS?

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